Russia, China Once Again Top USTR List Of Piracy Hot Spots

U.S. Trade Representative Susan Schwab issued the government's annual report highlighting the most significant problems facing U.S. intellectual property owners in foreign markets. The announcement arises from a provision of U.S. trade law known as "Special 301" that requires identification of countries that fail to provide adequate and effective protection to U.S. intellectual property. "Special 301" also provides for the imposition of trade sanctions or the removal of trade preferences where countries do not cure such deficiencies. Ambassador Schwab, while noting significant progress in a number of territories, placed 43 countries on notice that their current practices were not adequate and pressed for greater reforms. The two countries singled out for the greatest continuing problems in intellectual property protection were Russia and China. In response to today's announcement, the Recording Industry Association of America (RIAA) released the following statement from Executive Vice-President, International, Neil Turkewitz.

"We are grateful to Ambassador Schwab and the dedicated staff at USTR for their continuing efforts to achieve improved intellectual property protection and enforcement in global markets – steps that are essential to maintaining U.S. competitiveness in the 21st century. The work done by USTR and other government agencies plays a critical role in ensuring that the music community can continue to create and innovate, bringing original content to audiences around the world.

"Unfortunately, despite this work, conditions in far too many countries work against the ability to invest in the creation and distribution of original recordings, thereby undermining economic progress and cultural diversity. Once again, Russia and China top this list.

CHINA

"In China, the large-scale piracy of sound recordings continues unabated, and market-access problems remain unaddressed. In certain respects, these issues have only become more problematic for our industry, and RIAA fully endorses the recent action by USTR to initiate consultations in the WTO. In addition to the long-standing and well-known problems in the physical goods marketplace, massive piracy and severe market-access restrictions threaten the growth and vitality of exciting new online and mobile delivery platforms for recorded music. Accordingly, we welcome USTR's identification of Baidu as a 'notorious virtual market' for infringing materials. The fundamental reform of China's IPR enforcement regime remains urgent. China must abandon reliance on ineffective administrative remedies and begin imposing meaningful criminal remedies against commercial-scale piracy. We hope China will move quickly to create an environment more conducive to legitimate enterprise and, in particular, stress the importance of addressing practices like Baidu's deep-linking to infringing files that will, if left unaddressed, prevent the development of a healthy online marketplace.

RUSSIA

"Russia is simultaneously home to some of the biggest criminal enterprises involved in production and global trafficking in pirate optical discs and to some of the world's most notorious pirate websites such as allofmp3.com. A ray of hope emerged last year with the negotiation of a U.S.-Russia IPR agreement, under which Russia has committed to take effective action against physical and online piracy. This agreement has been referred to as the 'roadmap to WTO accession,' and we hope that Russia will follow this map religiously. The agreement provides for implementation of many of its provisions in June. We express our sincere hope that Russia will address these issues in a sound and responsible manner. However, if Russia fails to meet its obligations, the United States should respond accordingly and unilaterally impose sanctions on Russian exports to the United States.

BRAZIL

"We welcome USTR's decision to remove Brazil from the priority watch list – a move we have proposed for the past couple years. While piracy issues continue to undermine legitimate opportunities for Brazilian and American creators alike, the Brazilian government has completely reorganized its approach to fighting piracy and has committed itself to addressing the problem and expanding legitimate opportunities. There is a long road to walk, but the trail is clear. For the first time in many years, the piracy rate for recorded music has dropped below 50 percent. Unfortunately, a tremendous increase in the availability of unauthorized recordings on the Internet has kept this decrease in the physical piracy rate from resulting in increased legitimate sales. This disconnect makes clear that piracy involving the Internet and other digital media present enforcement challenges that need to be addressed in order to truly expand opportunities for creators – both in Brazil and abroad."

ADDITIONAL MARKETS

Thailand: It is appropriate that the priority watch list now includes Thailand, where the production and sale of pirated recordings continues largely unabated. The Thai government should significantly increase its enforcement efforts, including criminal prosecutions of those involved in the production and distribution of pirated product.

Czech Republic: We have similar concerns about the Czech Republic, which tolerates the presence of more than 50 large outdoor markets along the German and Austrian borders that openly sell mass quantities of pirated material. USTR's report identified these markets as being among the world's most notorious. We note that the U.S. will conduct an out-of-cycle review. If the Czech government has not taken meaningful action against these markets by that time, we expect that the Czech Republic would be placed on the priority watch list.

Canada: USTR has left Canada on the watch list. While we had proposed that Canada be elevated to the priority watch list, we hope that its recent engagement on trying to advance the protection of intellectual property in global markets reflects the government's intention to address these matters at home as well. For too long, Canada's laws and enforcement practices have been out of step with international standards and have threatened the vitality of Canada's creative sector. We hope that the Canadian government will move swiftly to expand economic opportunities in the cultural sector by introducing and enforcing appropriate norms and that we will not find ourselves in the position next year of once again calling for Canada's elevation to the priority watch list.